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While Warlords Battlecry III is primarily a real-time strategy game, it has some elements of role-playing in that players can complete optional quests, as well as create a customized Hero character that can level up from battle to battle and equip unique and powerful items.

The Campaign is a mixture of an overhead strategic map with real-time gameplay. Departing from the system used in Warlords Battlecry II, which consisted of a Risk-style board with territories, Warlords Battlecry III divides the world of Etheria into numerous locations (mostly cities) that players travel between, with various events at each. Almost all of the map locations have missions to play, some of which are not readily visible until other missions have been completed, as well as shops, academies, and/or mercenaries for hire. Once a player enters a mission, the game switches to real-time strategy gameplay reminiscent of games such as Warcraft and Age of Empires. Players use four resources, Gold, Metal, Crystal and Stone, which are used to produce a variety of structures and units. Unlike many other RTS games, resources are present as neutral buildings which can be captured and destroyed (not permanently) and generate resources automatically without player input. Although magic and spells come into play, games are usually decided by the player who has a combination of an overwhelming number of superior units and better micromanaging of his Hero character. The Hero typically becomes extremely powerful by late game and can slay tens of normal units alone.

Warlords Battlecry III is unique in its replay ability due to the diplomacy system and the number of races in the game. Depending on which missions have been completed and what was their original race selection, players can be Enemies, Neutral, Friendly, or Allied (which makes that race playable) with each of the 16 races. Preprogrammed biases explained in the backstory mean that it is more difficult for a player to be allied with two warring races, such as Dwarves and Plaguelords, but it is possible.

Warlords Battlecry III has more factions and hero types than the earlier games in the series, with 16 different races and 28 varying character classes. Heroes have groups of loyal soldiers called retinues, which will follow and fight for them in battle, and the level cap for units was increased to 50 in this game, up from 7. The human faction was split in this game into two new races: the Empire and the Knights, and the new races of Swarm, Plaguelord, and Ssrathi were introduced. Each old race received at least one new unit, sometimes several. New magic spells were added, including the all-new Arcane, Poison, and Divination schools. Several new hero classes were added, as well as a brand-new campaign engine and a completely new hero level-up method that includes the ability to level up in the middle of a battle (players were previously restricted to leveling up after battles only).

A Limited License Modding Project has been around for some time, as well, which provides use of the game's source code to any programmers looking to make a mark on the series. An NDA is required, and the game's Source Code remains available through the WBC3 Modding Project (c.f.), which was founded by some fans who had petitioned the game's developers for a limited use of the code. Though not very large, the home brewed project is one of the more active sites for casual gamers of the series, allowing them to exchange thoughts, programming information, and strategies. Some utilities are also available on the site, allowing players and programmers some insight into the engine mechanics, as well. The ultimate goal of this project, as determined by one of its original founding members, is to get as many people into the fold as possible, so that the game can become a public domain modding entity. Ideally, the project's current members are hopeful to get Mr. Fawkner to open source his game code, allowing maximum public interaction with the game. Although it may seem Mr. Fawkner's fault, the real entity that controls the source is Enlight, the publisher, that does not want to open source the game.

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